Shared Ownership EWS1 Resale

stephanbailey

Hey all, 

We're trying to sell our shared ownership flat in London and are getting conflicting information regarding whether or not we need an EWS1 certificate or not.

Our property is a first floor flat in a 4 storey building. The building has some cladding, but is mostly brick built.

I understand from reading the recent RICS guidance that not all properties necessarily need an EWS1, but the housing association (who are not great) seem to believe it will and are putting us off selling.

What's the best way to progress? Are lenders still insisting on EWS1 certificates for all purpose built flats?

Thank you all for your time.

Plaisir

I’m in pretty much the same situation, any help would be appreciated! Our neighbour recently had trouble remortgaging, but that could have just been with their lender?

L_T_88

The updated RICS guidance for 4 storey buildings is that an EWS1 is only required if the cladding are ACM, MCM or HPL.

Has your HA completed an assessment of the build-up of the external wall in order to confirm if the cladding panels are any of those types?

Lenders don't appear to have embraced these new guidelines yet and ultimately are free to apply their own policies with regards to requirements for lending on flats.

stephanbailey

Hello, thank you for getting back to me. We have timber cladding, but I believe our neighbours have had issues when trying to staircase. The HA are saying that there aren't many options, and are stalling on acquiring an ESW1 certificate

K_S

@stephanbailey It is complicated unfortunately. The government guidance, RICS guidance, etc is just that, not a rule.

Unfortunately, we are still seeing lenders asking for an EWS1 form if their surveyor deems one necessary. There is no uniform approach. So your prospective buyers' lenders are the ones who will utimately decide whether you may need an EWS1 form or not to be able to sell the property.

I can't speak for all brokers but I tend to avoid any cases where clients are looking to buy a flat in a block unless it's very evidently cladding-free or the building already has an EWS1. It's simply because lenders are completely unpredictable with their approach.

On the plus side, as the vendor the burden of due-diligence from a mortgage perspective falls on to the buyer so you might just have to put it on the market and see what the feedback is from prospective buyers when they start looking for mortgages.

Any other recent sales in the block?

kieran3184

The Housing Minister has released new guidance tonight that any block of flats under 18m will not require this form due to an expert panel he commissioned advising that the market is too risk averse and that blocks of flats under 18m even with some cladding are essentially safe.  He says he has the backing of some of the major lenders like Lloyds, HSBC and Barclays and that they will now review their policies in asking for these forms.

https://www.gov.uk/government/publications/independent-expert-statement-on-building-safety-in-medium-and-lower-rise-block-of-flats/independent-expert-statement-in-building-safety-in-medium-and-lower-rise-blocks-of-flats

L_T_88

Was just going to post this. Will wait to see if the lenders do change policy as up until now some of those named were asking for documents in addition to the EWS1 (cover letters, 4 questions which are already answered by the EWS1 etc) but hopefully this coming from Government will result in change.

Summary of the report is here.

lonibra

Just want to point out that the announcement is just that. They have announced that guidance (nothing mandatory) will be drafted and issued.

Banks will consider the final reissued guidance (once it's out) and then decide whether and what changes they will make to their valuation instructions. 

Even so, they can still leave it to the surveyor to decide whether an EWS1 (or alternate proof) is required.

At least in the short term, it could lead to an even worse version of what we're seeing now where freeholders say it isn't needed (based on this guidance which is still not out) and banks haven't changed anything.